Monday, November 24, 2008

Last week, I introduced Terry Anderson and PERC and talked about how someone can be an environmentalist and a capitalist simultaneously. This week, I present a specific example of a man who initiated a market-based solution to an environmental issue that was important to him.

Hank Fischer is an environmentalist. He is the Special Projects Coordinator for the National Wildlife Federation. And in 2001, he won an award for being not just an environmentalist, but and Enviro-Capitalist.

Fischer made a major mark on the enviro-capitalist world with his efforts to reintroduce wolves to Yellowstone National Park. Opposition from the plan came, not surprisingly, from local ranchers who feared that the wolves would kill their livestock. According to Fischer, when he met with local ranchers to discuss their opposition, one rancher put their concerns into very simply words. “It’s easy to be a wolf lover. It doesn’t cost anything. It’s the people who own livestock who end up paying for wolves." This simple statement made the solution obvious to Fischer. He needed to find a way that these ranchers could be paid for their losses.

At the time, Fischer worked with the Defenders of Wildlife, a group dedicated to projects like wolf reintroduction, and they began fund raising efforts aimed at creating a fund from which farmers could be compensated for any losses. But the necessary funds did not come simply from the kindness of others. They came about once Montana artist Monte Dolack created his vision of how wolves might look if restored to Yellowstone Park. Defenders of Wildlife sold posters of this artwork for $30 each and raised over $50,000, making the idea of a permanent fund a realistic possibility.

By devising a program where the environmentalists took “ownership” of the wolves, Fischer was able to devise a contract with the ranchers. The environmentalists side of the contract is that they will control (move, relocate, or kill) wolves that kill livestock, and compensate the ranchers for their losses, and the rancher’s side is to tolerate wolves that do not kill livestock.

By most measures, the program was a success. Wolves are back in Yellowstone and are growing in numbers. Plans are being put in place to remove them from the endangered species list, thanks in no small part to programs similar to the Yellowstone one in other states that have allowed wolves to thrive.

Fischer has moved on to grizzly bears and is trying to improve upon his plan in his work there. With the benefit of hindsight, Fischer sees flaws in the original program (according to Fischer it took too long, cost too much and still left some with bad feelings), but the environmentalists are happier and ranchers are no worse off after Fischer’s plan than before. So by introducing ownership into a market where external costs were preventing two sides from coming together and finding the best outcome, Fischer use a capitalist notion to advance an environmentalist view – making everyone better off in the exchange. Is anything better than that?

1 comment:

I watched a documentary on this a few weeks ago. Its interesting to observe the unexpected changes in the ecosystem at Yellowstone as a result of the removal of wolves. The upset balance resulted in over-abundance of certain plant and animal species, and near extinction in others.